(08/11/13 18:30:37)

* Prices fall on technical selling -trader
* Malaysian Oct palm stocks seen up 2.2 pct, to 1.82 mln T -Reuters poll
* Palm oil still targets 2,491 ringgit -technicals
* U.S. trans fat ban could boost palm oil demand

KUALA LUMPUR (Nov 8): Malaysian palm oil futures slipped to a near two-week low on Friday, as a bout of technical selling pressured prices, but the market was range-bound, ahead of a key industry report on production and stocks in the world's No.2 producer.

A surge in the palm market last Friday, prompted a round of profit-taking and a technical correction this week, stretching losses into a fourth straight day and dragging prices to post their biggest weekly loss, since early March.

Market players are waiting for official data on Malaysian end-October palm oil stocks, exports and output, that will be released on Monday by industry regulator, the Malaysian Palm Oil Board (MPOB).

A Reuters survey on Thursday, showed that Malaysian palm oil stocks probably inched up to 1.82 million tonnes in October, with the increase in inventories limited, as the seasonally high-cycle began to wane and monsoon rains dented production.  

"This is the fourth day, the market is down. There is a correction in prices and some technical selling going on. The focus will be on Monday, for the MPOB data," said a trader with a foreign commodities brokerage.

"The market is trading in a range. If the stocks and production go higher than expected, the market will try to test the 2,500 ringgit support level," the trader added.

By Friday's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had fallen 1.5 percent to 2,506 ringgit ($788) per tonne. Prices traded in a range between 2,506-2,540 ringgit, and have shed 4.6 percent so far this week — the steepest weekly drop in about 8 months.

Total traded volume stood at 28,901 lots of 25 tonnes each, lower than the usual 35,000 lots, as some investors stayed on the sidelines, ahead of the official stocks report.

Technicals showed that Malaysian palm oil is expected to fall further to 2,491 ringgit, as it has broken below support at 2,544 ringgit per tonne, said Reuters market analyst Wang Tao.

In other markets, Brent futures held steady above $103 a barrel on Friday, as a rebound in export growth added to signs of an improving economy in the second-biggest oil consumer, overshadowing a fall in crude imports, to a 13-month low.

A U.S. plan to ban artificial trans fats in processed foods, could strip away as much as 15 percent of the nation's edible soyoil demand, industry officials say, and give way to alternative vegetable oils such as palm oil, to replace the partially-hydrogenated soyoil, used in foods ranging from cookies to frozen pizza.

Investors will also be keeping watch on export data for the first 10 days of November, which will also be released on Monday, to gauge demand for the tropical oil, especially from major buyer China.

Traders say Chinese buyers could start re-stocking palm oil, ahead of its spring festival celebrated early next year.

In the vegetable oil markets, the U.S. soyoil contract for December fell 0.9 percent, in late Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange, fell 0.6 percent.

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.18 Malaysian ringgit)